When a bargain purchase occurs and the net amount of the fair values of the separately identified assets and liabilities acquired exceed the fair value of the consideration transferred:

Powell Company buys all of the outstanding common shares of South Bay Co. on Jan 1, 2009, for 1,500,000. If a contingent cash payment is a portion of the negotiated fair value of this acquisition, how will changes in the revaluation of the contingent performance payment affect the future finanacial statements

c) Change from the revaluation are reported as prior period adjustments and affect retained earnings

For the consolidating worksheet for a parent company and a sub'y acquired at the beginning of the current year

Under the partial equity method, the parent recognizes income when

How does the partial equity method differ from the equity method?

e) under the partial equity method, the balance in the investment account is not decreased by the amortization of the excess of acquisition fair value over book value of specific assets and liabilities

According to SFAS 142, which of the following statements is true?

one company acquires another company in a combination accounted for as an acquisition. The parent company decides to apply the initial value method in accounting for the combination. What is one reason the acquiring company might have made this decision?

Which one of the following varies depending on the internal record-keeping method the parent chooses to use for its investment in the sub'y

Direct combination costs and stock issuance costs are often incurred in the process of making a controlling investment in another company. How should those costs be accounted for in an acquisition transaction?